Pejman: the good, bad and ugly of the Downtown 2.0 Scottsdale pursuit

Over a year ago, the city of Scottsdale hired a consulting firm to make substantial recommendations to put Downtown Scottsdale back in the Limelight. After numerous outreach sessions, merchant interviews, and town hall meetings, the recommendations were finally released last week, and are headed to a council work study session on Monday, Nov. 13.

Here is the link to the 127 page public document that details the recommendations:

While some of the report’s recommendations are certainly worth pursuing, the show stops when the reader realizes how the funds are to be raised to pay for all of the proposed enhancements.

And, it is probably for this reason that while the interviews and town hall meetings were conducted, the financing options were not discussed in any way to turn off the public.
The report suggests raising funds through a variety of increased taxation options. The most controversial ones are:

Bob Pejman

1. Creation of a Business Improvement District (BID) year-after-year special assessment taxation on the downtown property owners/ businesses (pages 83-96 of Report): Since a 50 percent-plus property owner support is required to pass the BID, a very “clever” solution is proposed: let’s bring Fashion Square into the taxable district and this way it’s much easier to achieve the 50%-plus vote.

Unbeknown to most downtown small business owners, most commercial leases allow the property owner to pass this tax to the tenant. So this BID tax will be an additional involuntary tax on many business owners who are already struggling to stay afloat. Furthermore the creation of a BID is ripe for financial abuse, cronyism, favoritism, and wasteful ideas — all on the back of, and financed by the property/business owners.

For example, the recommended BID management staff alone will deplete a large percentage of this proposed $1.5-plus million/year tax as salaries and other expenses, and we will be lucky if any substantial amount is left over for the actual downtown improvements. From what I have researched, the BID approach was employed in 1997 with a disastrous outcome, which led to it’s disbanding by the city.

2. Installing Parking Meters downtown (page 97): while this option is usually employed to “manage” parking inventory, it is blatantly proposed here for the sole purpose of collecting funds with absolutely no regard as to their disastrous impact on the small business owners — the same businesses that are supposed to be helped.

While the report sites “free parking” as a current “advantage” to downtown shops, let’s put this in proper perspective: parking is free in all of Scottsdale. So there is no current advantage.

But instead, the proposed installation of Parking Meters in downtown will actually put the downtown small businesses at a severe disadvantage to the rest of Scottsdale’s shopping venues such as Fashion Square, Kierland, etc, and will cause a major flight of visitors away form downtown, running into the arms of the other shopping areas that offer free parking. It would be one thing to recommend the installation of parking meters in all of Scottsdale to put all shopping areas on a level playing field.

But to propose installing them in downtown alone constitutes a form of discrimination against downtown merchants in favor of their competitors.

Back to the report’s recommendations — while some good ideas are proposed, there is one particular recommendation that is guaranteed to challenge its credibility: as part of its arsenal of many solutions to “re-energize the arts & culture brand,” it is recommended the city bring in out-of-state artists to downtown and provide them with a five-year working arrangement of a working studio, living quarters, and living expenses (pages 104-105).

The staggering cost for this project is stated at $400,000 per year — a total of $2 million for 5 years.  The city itself, and the taxpayers would never ever sink to the wastefulness and ridiculousness of funding this project. So it is proposed the merchants and property owners sink to the senseless act of either taxing themselves via a BID or have parking meters kill their businesses to fund this idea.

Putting the absurd nature of this proposal aside, there is no sound logic that this venture will even be beneficial to the art galleries as proposed in the report. Wouldn’t it be much more prudent and effective to take a much small percentage of the $2 million amount and utilize it to promote the arts district instead? That district, incidentally, includes a $13 million city-investment in the Scottsdale Museum of the West, which by the way, gets nothing but lip service in the report’s recommendations.

While I see major constituent opposition to the above mentioned ideas, there are some ideas that I applaud.

As an example, I point to the idea of assigning designated city staff to work with the downtown property owners to improve our merchant tenant mix and revising our zoning laws to attract desirable businesses to downtown, while prohibiting others.

This is not far-fetched, since according to the report on page 31, three successful cities have already implemented this strategy to improve their downtowns.

This solution, by the way, doesn’t cost much money, if any, and should point us to think out of the box and come up with other similar practical solutions. We should also research the idea of connecting with Arizona Community Foundation as a support and funding mechanism for our downtown enhancements.

So, while I am in complete agreement that Downtown Scottsdale needs a revitalization and marketing effort to bring it back to the limelight, a much more targeted and cost effective plan is required … and one that doesn’t cause a negative impact on the small businesses that are the backbone of our downtown, and one that they can get solidly behind.

Editor’s note: Mr. Pejman is a Scottsdale resident and owns Pejman Gallery in downtown Scottsdale

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